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10 Ways to Teach Your Child to Save Money
Most saving tips taught to kids carry into adulthood.
Last holidays, my nephews were over at my place, and while watching a movie featuring a wealthy and quite
young man, I had a little conversation with one of them; the younger one.
He is ten and already knows a thing or two about money. Sadly his idea is what I would term comical.
He saw the wealthy guy in the movie spend lavishly on women and had a cute idea of how the money should have been used.
His idea?
He would buy one thousand cookies, ice creams, and fruit juice packs in sales so he would get a bargain then proceed to live grand by eating these all alone.
While I laughed at his innocence, this also got me thinking that he needs to learn about money and the fact that not every cent is to be spent, especially on cookies and sweets.
Kids are intelligent and you’d be amazed at how fast they soak up information if they find a willing and ready teacher, especially on topics like finance and money habits, which don’t get taught in schools as they should.
If you would like to teach your kids how to save, here are five saving tips you can start with.
10 Money Saving Tips for Kids
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1) Show Them the Value of Goals
It’s easier to save when you have a goal in mind. My daughter is just four years of age, but I have started her on savings.
As expected, it wasn’t easy getting her to save. However, we both had a sit-down and I had her list three things she would love to get. That done, I had to work at making her realize how exciting it would be to save up to get these items in a way a four-year-old child would understand.
Of course, I could very easily get these items for her, but that would defeat the whole purpose of learning to save. I also ensure only a small portion of her money gets put away and she still gets to use the bulk of it.
2) Give Them Their Own Money
Having your kids come to you for everything will never teach them responsibility.
You want to start teaching them the value of money at an early age by giving them their own money and holding them responsible for how it is spent.
You want to give them money that will last a specific duration; like a month and teach them to give account of how the money is used up.
3) Involve Them in Budgeting and Shopping
Several researchers have found that kids who take part in budgeting grow to understand the value of a dollar.
You should also have them tag along when you shop so they come to appreciate the increasing prices of products.
4) Encourage Them to Split Their Money Three Ways
Encourage them to split every money they get three ways:
- Spending
- Saving
- Giving
This will teach them that money is a tool to be used in different ways.
5) Live by Example
This is without a doubt, the best money-saving habit to teach your kids. Kids learn a lot by watching, you’d be amazed just how much. If you’re constantly going on about saving but they don’t see you doing the same, they’ll never take you seriously.
You want to set the pace by saving and ensuring they see you do so.
A good way to get this going by having a piggy bank of your own and dropping money into it often in their presence. Or you could make it a fun time where you all drop money into your piggy banks at the same time.
6) Come Up With a Few Ways to Save
- Make Use of a Piggy Bank
I got to know about piggy banks quite late when I was fifteen, but this did not in any way slow my need to save. Saving this way became a habit for me.
I remember saving with one of these then, happy to put a note here and a few cents there and knowing these were all adding up.
However, because kids are still kids, getting them to transition from spending all their allowance to saving the bulk of it might not come easy. For a start, it’s recommended they save just a portion of this allowance and gradually increase it as they come to see the advantage of the saving.
- Open a Savings Account
You can walk into any bank of your choice and request to open a savings account for kids.
My bank runs a programme where a marketer is permanently stationed at the ATM booth. He profiles you when you go to make withdrawals and calmly approaches you to introduce any of the several saving plans for kids to you and I remember opening a savings account for my daughter this way.
- Use a Kids Savings App
Alternatively, you could turn to one of the few savings apps for kids. These apps make it easy to save a portion of your child’s allowance and the best part is most are easy to use and you can teach your kids to operate them and take charge of their finances once they are of age.
Some good savings app for kids you want to check out include:
- PiggyBot
- iAllowance
- Bankaroo (created by 11-year-old Danielle, which means it’s a lot more child-friendly)
- Savings Spree
- Keep the Change
7) Reward Them for Saving
Since the very first instinct of kids is to spend every cent they get, you should reward them if they take the initiative to save on their own.
This reward can be in any form; monetary or otherwise. The idea is to create a good aura around saving so they are more encouraged to save.
I introduced a method that saw my nephews saving a lot more of their allowance – much more than we initially agreed on. The idea is that I would top any money they were able to save by 50%. So, if they managed to save up $200 within a timeframe, they got $100 extra.
8) Use Their Money Judiciously
I heard a child complain once about how his money got used up by his mom when she ran into some financial straits. Shed ‘borrowed’ the entire savings but forgot to pay back.
A child’s savings should be put to good use; the original goal for which it was saved. Doing otherwise would discourage the habit of savings and would likely defeat the initial goal; teaching them to save.
9) Don’t Hide Your Money Mistakes From Them
When you make a money mistake – an investment that doesn’t turn out the way we hoped – don’t hide this from them.
The best lessons are the ones we learn from watching others. Your kids will learn what not to do by seeing your money mistakes, the same way you would have learned what works and what doesn’t.
10) Give Your Kids Money Lessons
You could also just teach your kids about money directly using one or a combination of methods. There are a few available, from the several YouTube channels on finance, to the countless money books for kids on Amazon that would teach finance to kids in a way they would understand.
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Tags: Money tips, money habits, money saving habits, money saving tips, money saving ideas, money tips, teach your child to save money
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